Freescale acquired by equity firms for $17.6B

The drama is far from over, according to some observers. Freescale, a supplier of automotive chips, communications devices, and microcontrollers, has another possible option.

A Freescale press release noted that the merger agreement contains a provision under which Freescale "may solicit alternative proposals from third parties during the next 50 calendar days. In addition, Freescale may, at any time, subject to the terms of the merger agreement, respond to unsolicited proposals. If the company accepts a superior proposal, a break-up fee would be payable by the company."

Freescale's transition to a privately held company was seen as unusual, because over the two years since the company's IPO in 2004 the management team had wrung much of the fat out of the company, reducing staff and consolidated manufacturing into eight fabs.

Normally, private equity firms swoop in to acquire under-performing companies, reduce costs, and then either engineer a merger or sell off portions of the company.

Also, Freescale's size  it had revenues of $5.8 billion last year  is larger than typical private equity deals. Now, the deal leaves open the question of how much longer Freescale CEO Michel Mayer will remain at the helm.